Kindle-wielding Amazon dips toes into physical world

By Alistair Barr

SAN FRANCISCO (Reuters) - Amazon.com Inc is dipping its toes into the physical world as the largest online retailer offers more products in stores that may benefit from hands-on interaction with shoppers.

Analysts said the move may be inspired by the success of Apple Inc, which has hundreds of its own glitzy stores to show off iPhones, iPads and other gadgets and accessories.

Quidsi, an online retailer Amazon acquired in 2010, opened its first retail store in Manhasset, New York, last year to sell expensive cosmetics and perfumes under the BeautyBar name.

Amazon also plans to open a physical store in its home town of Seattle in coming months to showcase and sell its growing line of gadgets, including the Kindle Fire tablet, industry blog Good E-Reader reported this weekend.

At a conference in late 2011 run by the National Association of Real Estate Investment Trusts, some industry players hinted that Amazon might launch a retail store presence like Apple to let consumers test its gadgets, according to Cowen & Co. analyst Jim Friedland.

"The primary goal of the test is to determine if a physical retail presence can accelerate sales of Kindle devices and follow-on consumption of digital content at an attractive return on invested capital," Friedland wrote in a note to investors on Monday. An Amazon spokeswoman declined to comment.

Such moves are a major departure for Amazon, which has thrived by competing aggressively on price with traditional retailers that are saddled with the cost of leasing physical stores.

But Amazon's line of Kindle devices may sell better if consumers have a chance to try them out before buying.